The order modifies a previous ruling from the court, which permitted the firm to amend its complaint to include additional state defendants, and challenges to New York Judiciary Law §495 and LLC Law § 201.

Jacoby & Meyers claims that New York's only-lawyers-can-own-law-firms rule infringes on fundamental rights like equal protection and due process. Now, it's up to a federal district court to figure that out.

Last March, District Judge Lewis Kaplan dismissed the case, holding that the firm lacked standing since it hadn't proved it had been harmed by the rule. Judge Kaplan also observed that New York's Rule of Professional Conduct 5.4 wasn't the only obstacle to Jacoby & Meyers' open ownership plan: Judiciary Law §495 and LLC Law §201 also bar the firm from accepting investment capital from non-lawyers, The Wall Street Journal reports.

Both of the orders vacating the district court ruling and remanding the case include similar language. In each, the Second Circuit concluded, "We see no reason not to remand the case back to the district court, in order to permit the plaintiffs to amend their complaint to name additional state defendants and challenge other provisions of New York law that prohibit non-lawyer investment in law firms."

Andrew Finkelstein, the managing partner at Jacoby & Meyers, told Bloomberg, "The Second Circuit clearly said they want the judge to make a determination on the merits."

The district court's decision -- and, let's face it, the subsquent appeals -- could shake up the legal industry. Currently, Washington, D.C., is the only jurisdiction that allows non-lawyers to own a stake in a law practice.

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U.S. Second Circuit features features news and information from the U.S. Court of Appeals for the Second Circuit, which hears appeals from U.S. District Courts in Connecticut, New York and Vermont. This blog also features news that would be of interest to legal professionals practicing in the 2nd Circuit. Have a comment or tip? Write to us.